Rebuilding a Brand After Bankruptcy

After liquidating its assets and closing all 150 corporate locations, Bennigan’s is making a comeback with the help of its new CEO

Aha! Moment: “Not long ago, we converted a closed TGI Friday’s in the Fort Worth [Texas] market to a Bennigan’s. Every day that the restaurant was under construction, passersby were stopping to watch the construction. They’d even get out of their cars and peek in the windows, and they’d tell us how excited they were about the opening. That reminded me what an iconic brand Bennigan’s is.”

Four years ago, the Bennigan’s restaurant chain filed for Chapter 7 bankruptcy. Now, the Irish-pub themed restaurant is finding its stride again thanks in great part to the management of CEO Paul Mangiamele, who was hired in 2011 to herald what he calls a “renaissance” of the iconic brand. “I had the battle-hardened experience and confidence needed to reposition the brand,” Mangiamele says. Armed with a new logo, financial model, and menu, Mangiamele shares with Profile how he’s ushering in Bennigan’s comeback.

Bennigan’s has a rich history. The company was established in 1976, as part of the Pillsbury Corporation. It was the brainchild of company vice president and Steak and Ale founder Norman E. Brinker. People liked the [Bennigan’s chain] and remembered it. For more than three decades, the brand evoked a certain nostalgia.

Over time, mismanagement led to financial difficulties. The company was sold and bought numerous times, but it failed to evolve. The restaurant concept wasn’t updated, and the food quality deteriorated. The result was a decline in customer visits and revenues. The restaurant just wasn’t thriving.

The restaurant’s parent company filed for bankruptcy protection in July of 2008. Instead of filing for Chapter 11, which would have led to restructuring the company’s debt, parent company Metromedia Restaurant Group filed for Chapter 7, which resulted in a liquidation of assets. As a result, on July 29, 2008, all 150 corporate locations across the United States were closed.

That would have been a mortal blow to many brands. The Bennigan’s brand was strong enough to survive, though. It’s a tenacious brand. We’re in 10 countries. We have tremendous intellectual capital through our franchisees. They remained open when the corporate stores had closed and carried the banner for the brand until a revamp of the Bennigan’s brand began in November 2010.

Bennigan’s donated copious trees to Openlands and the City of Chicago in honor of the restaurant chain’s 35th anniversary. “Most retailers unlock the door and hope people come in; I want to go outside our door and bring our product to the people,” says Paul Mangiamele, CEO (far right).

I came onboard in May of 2011. I had recently completed my tenure as president and CEO of Salsarita’s Fresh Cantina when I was approached by the then CEO of BFC [Bennigan’s Franchising Company, LLC] to discuss taking the helm of Bennigan’s. I had the battle-hardened experience and confidence needed to reposition the brand. I was both humbled and honored.

I see myself as heralding the renaissance of Bennigan’s. I did what any CEO would have done and assessed where we’d been, where we were, and where we wanted to go. It involved, in collaboration with our franchisees, a 360-degree review of all functions, by which I mean operations, real estate, training, communications, purchasing, marketing— all the disciplines of the business.

Our strategy to turn the brand around was multipronged. A one-dimensional strategy would not have sustained significant same-store sales growth, so all the functional areas we assessed in our 360-degree review needed to be addressed. We created a new logo. We have a new store prototype. We have a new financial model. We have a new franchise model. We have a refreshed menu, a new remodel program, and we have a new attitude.

Updating our stores and revamping our menus was critical. We did a remodel to bring the trade dress into the 21st century. The menu had to be repositioned as well, since we have signature items no one else has—the Monte Cristo, Drunken Pot Roast, Turkey O’Toole, the Big Irish Burger. We wanted to keep the iconic image and signature products, but improve upon them.

We also introduced a new marketing effort. Most retailers unlock the door and hope people come in; I want to go outside our door and bring our product to the people. To that end, we developed a social-media strategy, tapping into Facebook, Twitter, Yelp, and Four Square. We added even more texture by hiring a brand manager who is responsible for hiring brand ambassadors for every restaurant; these team members help us not just with the local social media, but also with neighborhood marketing programs. We’re also introducing the biggest initiative in Bennigan’s storied history: catering. None of our direct competitors are doing this … Catering will be game changer for us.

We’re already seeing results. We have a base of 80 restaurants—two corporate and the rest franchises—and we currently have 14 restaurants under development or construction. We are also introducing, “Bennigan’s on the Fly,” our nontraditional, fast-casual concept that will be in universities, airports, and businesses. That’s almost 20 percent growth—not bad for a brand that went through an unfortunate period not very long ago.

People ask me if I know how difficult it is for a company that has gone through Chapter 7 to reestablish itself and I say, “Yes, I know how difficult it is, but with a legendary brand like Bennigan’s and colleagues that bleed green we will continue to ‘live’ Bennigan’s and return this iconic brand to the top of food service.” Our goal is not to be in a sea of sameness; our goal is to change the way food service perceives casual-themed restaurants. We are rebuilding the emotional connection to our guests by our flawless execution and by always going above and beyond our guests’ expectations.